Trading the Brexit, anyone?

[cogs]

Anyone planning (or game enough) to trade the Brexit?

GBP is nasty at the best of times, I am staying well away, unless I get brave on the day and place some tiny stop orders a thousand or so pips away from market. I imagine the event to have an impact similar to the SNB cracker.

Watched this recently - Brexit The Movie https://www.youtube.com/watch?v=UTMxfAkxfQ0

 

[cynic]

Anyone planning (or game enough) to trade the Brexit?

GBP is nasty at the best of times, I am staying well away, unless I get brave on the day and place some tiny stop orders a thousand or so pips away from market. I imagine the event to have an impact similar to the SNB cracker.

Watched this recently - Brexit The Movie https://www.youtube.com/watch?v=UTMxfAkxfQ0

The biggest crackers are usually the one's that the market didn't anticipate. The SNB fireworks probably had a greater impact, than might otherwise have occurred, because some deliberate lies were told by the SNB ahead of its announcement.

Unless a similarly mendacious scenario arises, I would anticipate that the market will be better braced for the oncoming uncertainty surrounding the possibility of Brexit.

 

[cogs]

Lets hope so.

Could be fizzer even, but it does have the fundamental makings to be quite a market mover.

I admit to getting frustrated at all the scare mongering going on.

 

[NickF]

Anyone planning (or game enough) to trade the Brexit?

GBP is nasty at the best of times, I am staying well away, unless I get brave on the day and place some tiny stop orders a thousand or so pips away from market. I imagine the event to have an impact similar to the SNB cracker.

Watched this recently - Brexit The Movie https://www.youtube.com/watch?v=UTMxfAkxfQ0

Thanks for sharing that video - very informational. If I was British, I'd probably vote for Brexit - it seems to me they are worse off by being in the EU...

So, if UK exits the EU, what should we expect from the GBP and EUR? I know little about politics and economy, but I would expect the GBP would raise and EUR will drop? Even if I can't say for sure that UK will do better immediately, I think the EU will be at a loss without UK (both short term and long term).

Nick

 

[History Repeats]

Too risky trading it outright, who knows the next post might suggest stay voter > exit voter..ect. I'd use options if taking a punt.

 

[NickF]

Too risky trading it outright, who knows the next post might suggest stay voter > exit voter..ect. I'd use options if taking a punt.

It also depends on how much money we are willing to use. With great risk also comes great opportunity. Probably trading about an hour after the news is released, trading in the direction of the trend and using a trailing stop loss could reduce the volatility. But of course, if I knew better, I'd be making money instead of losing...

 

[cogs]

It also depends on how much money we are willing to use. With great risk also comes great opportunity. Probably trading about an hour after the news is released, trading in the direction of the trend and using a trailing stop loss could reduce the volatility. But of course, if I knew better, I'd be making money instead of losing...

I tend to agree. The movie was very biased even to the point of potentially cherry picking the interviewees, having said that they put forward a very strong case and appear to only benefit from leaving.

As cynic illuded to it is not a total surprise event, or exactly like the SNB bankster move. To date GBP market responses to any mention of leaving, has the GBP moving down against the dollar, also mentioned in several articles of the EUR/GBP will aim for parity. Many years of experience has burnt into my brain not to trade the obvious though, so I personally will look for the momentom move first and/or the counter move from an over shoot, or the stop order if the stars align. I kind of expect an oversized NFP if a leave happens.

 

[CanOz]

One way to trade the associated volatility might be to look for levels where traders could be trapped and take advantage of rumors and pole results leading to the actual vote. For example if the market has been in a bull channel i wouldn't be buying pullbacks to the channel but watching for the stops to get taken out and the longs to bail. So sort of contrarian to the the trend, maybe use some of the those sentiment indicators for timing as well....just throwing some ideas out there.

Currency pairs EUR/GBP EUR/CHF and GBP/CHF maybe.

 

[cogs]

Good approach if they vote to stay, squeezing the stops for more liquidity, and to be treated like a news event, however if they leave I see large fundamentals kicking in, where? Not sure yet.

 

[cogs]

There appears to be directional plays that need a catalyst just like brexit.

Here I go, stick it all out on a ledge, brexit goes ahead and Britain exits.

Unfinished plays for at least these 2.

EURUSD up to at least 1.22 (obvious unfinished business there).



GBPUSD drops to test 1.35, and maybe beyond.

 

[cogs]

Hmm might have to revise that EUR long, bit of a brave call anyway. Looks more like we may see parity with the USD.

Decided to stay out and watch for now, just stick with gold and AUD pairs.

 

[NickF]

Hmm might have to revise that EUR long, bit of a brave call anyway. Looks more like we may see parity with the USD.

Decided to stay out and watch for now, just stick with gold and AUD pairs.

I also think the EUR will fall if UK exits. It will be very bad news for EU if that happens, since UK is one of the major players.

I've seen a video from BellDirect where they said they expect the JPY and CHF to be the strong currencies during this period.

Nick

 

[cogs]

Sad that a lady gets murdered which leads to a massive correction in currencies and gold in particular. I think this was an opportunistic moment for institutions to rape the momentum.

Found an interesting article some time ago studying 'stop loss orders and price cascades in currency markets' which is quite dated now but goes a long way toward how your little order can actually influence price direction.

https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr150.pdf

The central idea is that stop-loss orders contribute to large, rapid, self-reinforcing price
moves, or “price cascades,” as follows: a change in the exchange rate from any source triggers
the execution of stop-loss orders, which propagates the initial exchange rate change, thereby
triggering the execution of more stop-loss orders, etc. Such a price cascade would be cut short by
stabilizing speculation if arbitrage were unlimited and if stop-loss orders were public knowledge.
However, the existence of individual stop-loss orders is generally known only to the agents
placing them and to the dealing bank monitoring them.

 

[ThingyMajiggy]

So what would be the best instrument to trade for this for those trading it? I am thinking the EUR/GBP would be obviously the most volatile? How do you actually trade the pure GBP by itself or is that not possible? As it's all just based vs another currency isn't it? Like how much will the GBP/USD be impacted as its the pounds' value relative to the USD?

I don't know much about all this and trading Forex so just looking into it as it's a good example to talk about together and see how it plays out. Have been watching some YouTube vids on the Brexit, interesting arguments for both sides. I was wondering why the GBP would supposedly plummet like everyone is suggesting if the Brexit does happen? It's not like the EUR is going terribly well so I would have thought the EUR would get hit as well and then the GBP would recover and actually end up stronger than the EUR?

Anyone going to have a go with trading this? What about hedging it with something?

 

[NickF]

So what would be the best instrument to trade for this for those trading it? I am thinking the EUR/GBP would be obviously the most volatile? How do you actually trade the pure GBP by itself or is that not possible? As it's all just based vs another currency isn't it? Like how much will the GBP/USD be impacted as its the pounds' value relative to the USD?

I don't know much about all this and trading Forex so just looking into it as it's a good example to talk about together and see how it plays out. Have been watching some YouTube vids on the Brexit, interesting arguments for both sides. I was wondering why the GBP would supposedly plummet like everyone is suggesting if the Brexit does happen? It's not like the EUR is going terribly well so I would have thought the EUR would get hit as well and then the GBP would recover and actually end up stronger than the EUR?

Anyone going to have a go with trading this? What about hedging it with something?

I am not sure if the best instrument would be EUR/GBP. I think if UK exits, both the EUR and GBP could be negatively impacted for the next few weeks. If it doesn't exit, probably both will quickly go up together. In my opinion, we should consider using a stable currency vs these two volatile ones.

So far, I don't understand the value of hedging. Why not trade less of the instrument of your choice - i.e instead of 1 lot, go with 0.5 lots?

Nick

 

[noirua]

Following the death of UK MP Jo Cox, all prospects of a Brexit are dead in the water. Scotland and Northern Ireland are strongly in favour of Remain and all Brexit momentum is lost.

 

[CanOz]

Following the death of UK MP Jo Cox, all prospects of a Brexit are dead in the water. Scotland and Northern Ireland are strongly in favour of Remain and all Brexit momentum is lost.

Is this reflected in the latest polls? Have there been any polls since her death?

I see the Euro has really caught a bid this morning....

Really sad that someone's death like that is now so front and center in terms of market sentiment...what a bizarre turn of events.

 

[cogs]

Following the death of UK MP Jo Cox, all prospects of a Brexit are dead in the water. Scotland and Northern Ireland are strongly in favour of Remain and all Brexit momentum is lost.

It certainly appeared that way Saturday morning. I have trouble understanding the irrationality of such an event, I mean, was it her vote that held the sway in the outcome of Brexit?
How many other humans died on that same day in the UK and their lives did not influence the future of Britain and Europe, or market movements.

You only have to look again at market opening this morning, I guess mostly due to thin volumes (which is a worry in itself) the whole crazyness and hype of this event. They are in many ways holding the markets and future of many people to ransome, and playing God.

 

[cogs]

Well apart from the obvious it has been a very quiet few days in FX pairs for the beginning of the week. Time and time again when I see this at the beginning of the week, but by the end of the week volutility more than makes up for it with wild swings.

So far the Brexit FX market impact for late week is looking for violent moves whether they be up down or sideways. Sounds obvious, but I can usually count on it. Every week has a wild session, usually around Thursdays (Aus time). Conversly if the week starts off wild, it will be quiet toward the end of the week.

 

[CanOz]

I think the 6B has enough steam to get to 1.52